Relationships
We aim to enhance our relationships with all of our external stakeholders including investors, customers, regulators, governments, suppliers and the communities in which we operate.
Investor relations |
Our aim is to ensure that the value of our business is reflected in our share price. We aim to make National Grid attractive to debt investors so that we can finance our operations as effectively as possible. |
We have been active this year in communicating with equity investors, conducting over 350 investor meetings during the year.
One of our objectives is to increase the number of shareholders in the US to reflect the increased size of our US operations, and we held a presentation to US investors in October 2007 following the completion of our acquisition of KeySpan.
We also presented to debt investors in 15 countries across Europe and North America, and held conference calls with debt investors in 2 other countries during the year. Despite turbulent market conditions, we have continued to issue long-term debt, raising £1.6 billion during the year.
We also operate a shareholder networking programme, the aim of which is to allow shareholders to gain a better understanding of the business. The programme includes visits to operational sites and presentations by senior managers and employees.
Customers, regulators and governments |
The primary concern of our customers, regulators and governments is that we deliver a safe, efficient and reliable service, now and into the future. Hence our relationships reflect the quality of our operational performance. |
For customers, it is important that we treat them with respect, that we communicate clearly and that we make interaction with them as straightforward as possible. Our focus on customer service and operational excellence is also a critical component of our relationship with our regulators and governments, underpinning the building of trust with both. This involves being responsive to the needs of our regulators for high quality information, complying with rules and regulations, operating in an ethical way and, most importantly, delivering on our promises.
In the UK, we continue to work very closely with Ofgem on the renewal of our electricity and gas transmission and gas distribution networks, and in expanding those networks to meet new and changing demand. In addition, we seek to maintain a professional approach with Ofgem in areas where we disagree, in particular with respect to their investigation into metering services in the UK as discussed in current and future developments.
In the US, we strive to achieve and maintain strong working relationships with our state regulatory commissions and the FERC.
Suppliers |
We aim to work in partnership with our suppliers, developing constructive relationships and working together effectively. Our objective is to develop contractual arrangements with our suppliers that align their interests with our own as far as possible and share financial risks appropriately. |
Our objective is to use the scale and breadth of our activities to get the best value for money from our suppliers. We have now established a single procurement function covering all of our supply chain activities in the UK and the US as a key step on the way to delivering this objective.
During the year we implemented a new back office system in the UK, which has improved our ability to manage procurement activities as well as providing other benefits. Unfortunately, relationships with certain suppliers were temporarily hampered by teething problems with the new system, leading to delays in payment in some circumstances. We have resolved many of the issues that have arisen and we continue to address those that remain, aiming to ensure suppliers are paid on time while maintaining appropriate financial controls.
We also aim to build on our achievements in creating alliances with contractors in the UK to deliver construction projects in our Transmission and Gas Distribution businesses, benefiting from a closer and more constructive working relationship that we believe can be achieved when project objectives are aligned and financial risks are shared.
In addition to focusing on efficiency and value for money, we have established clear principles and objectives concerning the impact of our supply chain economically, socially, environmentally and on human rights. We expect our suppliers to address these wider areas in working with us.
Community involvement |
National Grid’s role as a good corporate citizen supports our ambitions, and is delivered through a sustained and consistent approach. |
Our community investment objectives include supporting communities, developing our business, supporting our employees and enhancing our reputation through targeted community involvement activities. Our approach continues to be centred on three key themes: energy and the environment; education and skills; and community development.
During the year, we have again reviewed our social policy to ensure our approach to community investment remains relevant to, and supports society’s wider social and environmental priorities. This review has included analysis of existing activities and best practice, both across National Grid and externally.
We continue to use the model developed by the London Benchmarking Group to provide a framework for measuring and reporting our community investment contributions, by capturing, in accordance with the model, spend against our key themes. On this basis, we invested some £9 million in support of community initiatives and relationships across our operations in 2007/08 compared with £9 million in 2006/07 and £8 million in 2005/06.
We have engaged independent experts to review our community investment activities and to ascertain whether our work in this area meets with the needs and expectations of relevant stakeholders. This review will also benchmark our activities against leading UK and US peers.
In our 2008 employee engagement survey, 55% (2006: 68%) of respondents considered National Grid makes a positive contribution to the communities in which we operate.